Mobilising capital at scale is one of the key ways our industry can help manage climate risk. Achieving this at pace is vitally important, not only to aid the transition to net zero of traditional industry, but also to support disruptive innovation and build adaptive resilient infrastructure.
In so many ways, the financial sector is experiencing the early insight into the growing risk, as we calculate and seek to quantify the impact our changing climate is likely to have on our investment portfolios, on our lending exposures and even on our physical assets.
At the same time, these challenges create tremendous opportunities for us to partner with our clients in lock step as we both seek to find the most efficient pathways to transition towards net zero without materially impeding economic development and stability1.
Both the challenge and the opportunity are particularly acute for us, as our footprint covers many of the areas most physically vulnerable to climate change2 and where livelihoods are dependent upon industry sectors that are severely under threat. This is why it is such an important moment for me to join the bank as Chief Sustainability Officer.
I believe there is a real chance to make a meaningful societal difference with the exceptional foundation and extraordinary commitment from the most senior levels of the organisation to drive positive impact.
1 https://www.bis.org/review/r211109b.htm 2 https://www.imf.org/en/Publications/fandd/issues/2018/09/southeast-asia-climate-change-and-greenhouse-gas-emissions-prakash#:~:text=Average%20temperatures%20in%20Southeast%20Asia,by%20Germanwatch%2C%20an%20environmental%20group.
Given the bank’s extensive roots in the developing markets and long history supporting governments and the private sector in the shared quest for economic prosperity, we are uniquely positioned to play a leading role in working across traditional lines to tackle the climate challenge while ensuring we focus on a just transition.
By drawing on our deep expertise in collaborating with policy-makers, regulators, civil society organisations and other stakeholders, we can support global partnerships that prioritise problem solving and are solutions focused.
Providing capacity building, engaging in whole-systems thinking, sharing best practice, encouraging more robust disclosure, fostering transparent liquid carbon markets, supporting blended finance structures and driving toward improved climate-risk management are all parts of the equation that can attract investment capital to finance the transition and adaptation that is so needed in our markets.
Coming together with a broad group of stakeholders is something we are striving to do more of.
And our efforts are set against the backdrop of our own wider commitment to sustainability3 – public net-zero targets, leadership in voluntary carbon markets and support for innovation in green finance.
The track record of human capacity to meet great challenge coupled with the power of market forces and efficiencies give us a reason to be optimistic. If we partner effectively to ensure we support the right enabling conditions, I am confident that we can harness the power of the financial sector to deliver the sustainable future we wish to see.
I look forward to partnering with you on our sustainability journey.
3 https://www.sc.com/en/sustainability/position-statements/climate-change/
